Xcel Energy Inc. · NASDAQ:XEL
Xcel Energy — Morgan Stanley Global Electricity & Energy Conference 2004
27 slides from Xcel Energy's conference presentation, Mar 24, 2004
Slide 1: Morgan Stanley Global Electricity & Energy Conference March 24, 2004
Morgan Stanley Global Electricity & Energy Conference March 24, 2004
Slide 2: Safe Harbor
This material includes forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements include statements that are intended to be identified in this document by the words "anticipate," "estimate," "expect," "projected," "objective," "outlo
Slide 3: Dick Kelly, President and Chief Operating Officer
Dick Kelly President and Chief Operating Officer
Slide 4: Today's Expectations
Today's Expectations Focus on reliability Regulatory oversight increasing Profitability linked to regulation Reduce dependence on gas-fired generation
Slide 5: Xcel Objectives
Xcel Objectives Invest additional capital in utility business with assurance of regulatory recovery Provide competitive returns to shareholders Improve credit ratings
Slide 6: Xcel Energy Inc. Organizational Structure
Xcel Energy Inc. Regulated Nonregulated and Holding Company Northern States Power Company - Minnesota Northern States Power Company - Wisconsin Public Service Company of Colorado Southwestern Public Service Company Subsidiaries $193 $57 $228 $82 $(50) Organizational Structure 2003 Income from Contin
Slide 7: 4th largest US electric and gas utility - Business Segments 2003
4th largest US electric and gas utility - above average growth Electric Gas Revenue $5,970 $1,721 Net Income $463 $95 Customers 3.3 1.8 Business Segments - 2003 Millions Generating Plants Denver Amarillo Minneapolis/St. Paul
Slide 8: Power Supply - 2003
Power Supply - 2003 Owned 72 > 5 Years 21 1-5 Years 4 <1 Year 3 Energy Contracted Purchases 28% Owned Generation 72% < 1 Yr 3% Coal 51 Nuclear 12 Purchases 25 Other 2 Gas 10 Purchases 25% Other 2% 1- 5 Yrs 4% > 5 Yrs 21% Nuclear 12% Coal 51% Gas 10% Capacity
Slide 9: Coal Supply
igawatt-hours Gigawatt-hours 2004 99 2005 95 2006 80 Coal $5 - $16 2004 - 2017 Transportation $5 - $12 2005 - 2013 Delivered Coal $12 - $20 Coal Supply 99% 95% 80% Contracted Coal Supply ** Cost * Contract Dollars/Ton Expiration * Western coal 8,400 - 11,400 BTU/lb ** In excess of 30 million tons/ye
Slide 10: Electric Fuel and Purchased Energy Cost Recovery Mechanisms
Electric Fuel and Purchased Energy Cost Recovery Mechanisms Minnesota: Monthly recovery of prospective costs Colorado: Recovery of costs with sharing of deviations up to + $11.25 million from benchmark Texas: File for semi-annual adjustments - required if + 4% annually Wisconsin: Biennial rate case
Slide 11: Improving Environmental Performance
Improving Environmental Performance Owned generation (Gwh) Pounds per Mwh igawatt-hours Gigawatt-hours 1997 73883 1998 76579 1999 78361 2000 81765 2001 81203 2002 82335 2003 84185 igawatt-hours NOX Sulfur dioxide Emission Rate Nitrogen Oxide Emission Rate 2000 2001 2002 2003 1997 4.6 5.7 90 20.4 199
Slide 12: Capital Expenditures
Customer Additions 35 Replacement/Refurbishment 31 Upgrades 11 Other 23 Capital Expenditures Base Level: $900 to $950 Million Customer Additions 35% Replacement/ Refurbishment 31% Upgrades 11% Other 23%
Slide 13: Large Project Capital Expenditure Forecast
Large Project Capital Expenditure Forecast 0 100 200 300 400 500 2004 2005 2006 2007 2008 2009 MERP Combustion Turbines PI Steam Generators Dollars in millions
Slide 14: Metro Emissions Reduction Program (MERP)
Metro Emissions Reduction Program (MERP) Target ROE 10.86% with sliding scale Equity ratio 48.5% Rate Rider in effect January 2006 Budget approximately $1 billion 300 Mw incremental capacity at time of system peak
Slide 15: Potential Colorado Coal Plant
Potential Colorado Coal Plant Growing load requires more base-load generation Coal generation reduces price volatility Up to 750 Mw at existing Comanche plant site Estimated cost of $1.3 billion with potential for multiple owners Resource plan to be filed April 30, 2004
Slide 16: Regulatory Activities
Regulatory Activities Minnesota Metro Emissions Project Wisconsin Rate Case Capacity Cost Rider - Colorado Colorado Resource Plan - Filing April 30
Slide 17: Ben Fowke, CFO - Financial Overview
Ben Fowke Vice President, CFO and Treasurer Financial Overview
Slide 18: 2004 Earnings Guidance
2004 Earnings Guidance Utility Operations $1.25 - $1.33 Holding Company Finance Cost (0.08) Seren (0.03) Eloigne 0.01 Other Nonregulated Subsidiaries 0.00 - 0.02 Xcel Energy $1.15 - $1.25 EPS Range Dollars per share
Slide 19: Capital Structure Year-End 2003
Equity 43 Preferred Equity 1 Debt 56 Capital Structure Year-End 2003 Xcel Energy Consolidated Equity 43% Preferred Equity 1% Debt 56%
Slide 20: Capital Structure Year-End 2003 by Utility
Equity 47 Debt 53 Capital Structure Year-End 2003 47% PSCo 53% Equity 50 Debt 50 50% SPS 50% Equity 47 Debt 53 47% NSP-MN 53% Equity 56 Debt 44 56% NSP-WI 44% Equity Debt
Slide 21: Long-Term Debt Maturities
Long-Term Debt Maturities Dollars in millions 2004 2005 2006 2007 2008 NSP-MN 4.5 74.7 204.8 2.5 2.7 NSP-WI 0 0 0 0 80 PSCo 147 137 127 102 320 SPS 0 0 500 0 0 Other Subs 9 13 6 6 6 Hold Co. 0 0 0 230 246
Slide 22: Projected Cash Flow Statement Assumptions
Projected Cash Flow Statement Assumptions Net income based on mid-point of 2004 EPS guidance range of $1.15 - $1.25 Although earnings are expected to grow over time, for illustrative purposes earnings remain flat for 2004-2006 Although depreciation is expected to grow, for illustrative purposes depr
Slide 23: Projected Cash Flow Statement: Operating and Investing
Projected Cash Flow Statement Dollars in millions Net Income $ 510 $ 510 $ 510 Depreciation & Amortization 800 800 800 NRG Tax Benefit 155 125 125 Tax Refund NRG 325 0 0 Cash Provided by Operations $ 1,790 $ 1,435 $ 1,435 2004 2005 2006 Operating Activities Capital Expenditures $(1,220) $(1,250) $(1
Slide 24: Projected Cash Flow Statement: Financing
Projected Cash Flow Statement Dollars in millions Dividend $(300) $(300) $(300) DRIP 20 40 40 Issuance of Long-term Debt 160 224 838 Repayment Long-term Debt (160) (224) (838) Cash Used for Finance $(280) $(260) $(260) Net Increase (Decrease) $(542) $(155) $(205) Cash at Beginning of Year 573 31 (12
Slide 25: Funding Growth and Reducing Leverage
Debt Beginning 6,737 6,737 6,892 Net Issuance 0 155 205 Ending $6,737 $6,892 $7,097 Common Equity 44% 45% 45% Funding Growth and Reducing Leverage Projected Equity and Debt Levels Dollars in millions Beginning $5,166 $5,396 $5,646 Net Income 510 510 510 Dividends (300) (300) (300) DRIP 20 40 40 Endi
Slide 26: Dividend
Dividend 2003 continued operations payout ratio 61% Potential dividend payout ratio 60 - 75% Issues to be considered - - Cash from operations - - Level of utility capital expenditures - - Dividend payout ratio - - Credit rating implications
Slide 27: Xcel Energy Investment Merits
Xcel Energy Investment Merits Low risk, integrated utility Simple business model No restructuring planned Constructive regulation Improving financial strength Total return 7 - 9%
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